A Template for EPC Project Management and · PDF fileA Template for EPC Project Management and...

A Template for EPC ProjectManagement and Execution

Richard P Helper, PSP

William Mihelich

PLEASE USE MICROPHONE FOR ALLQUESTIONS AND COMMENTS!

2

BIO of Richard Helper

• President, RPH Consulting, Ltd., Ann Arbor, Michigan

• 35 years EPC Project Management and Operationsexperience.– 10 Years Consulting

• Owner’s construction manager for $1.2 Billion capitalprogram

• Worked with two major GCs on developing EPC templates.

– 17 Years with Aker Kvaerner• Mining and Metals, Power, Oil & Gas

• Proposals, Project Management, Operations Management

• Claims and Resolutions

– Began working on EPC templating in 2003

3

BIO of Richard Helper

• Something You Don’t Know About Me

– Private pilot, Instrument rated.

4

BIO of William Mihelich

• General Manager Project Services, Matrix Service Inc.

• 26 years Project Management experience.

– Operations and Project Management for Constructor onPlan Spec and EPC projects mostly in Oil and Gas

– Project Controls Specialist for an Engineering Company

– Owner’s Capital Program Manager

– Began working on EPC templating in 2014

5

BIO of William Mihelich

• Something You Don’t Know About Me– I’m an avid sailor and hope to someday cross the Pacific Ocean

aboard a sailboat

6

Presentation Outline

• Review of information and sources available to the EPCindustry

• How our case study company organized their current way ofdoing projects

• How our case study company aligned and integrated AACEIand CII knowledge and publications to their processes.

• How our case study company assigns performanceresponsibilities to roles.

• How our case study company ensures processes are beingfollowed by project teams

• How our case study deploys the knowledge base.

• Questions

7

INFORMATION SOURCES AVAILABLE TOTHE EPC INDUSTRY

8

Information Sources

9

Information Sources

• AACE

– Approximately 75 Recommended Practices

– 23 Professional Practice Guides

– Monthly / Bi monthly publications for several decades

• CII

– Approximately 700 publications, tools and trainingcourses

– 23 Professional Practice Guides

• PMI

– PMBOK

10

Case Study Company

• Our Case Study company:

– Incorporated in 1984

– Initially provided engineering, maintenance and repairsto oil tanks

– Expanded services to constructing new tanks

– Acquired an engineering company to add Cryogeniccapability as well as complete terminal engineering

– Acquired companies that perform maintenance inrefineries

– Acquired companies that perform maintenance andcapital projects in other industries

11

Case Study Company

• New CEO in 2011

– World class HSE culture

– Develop EPC capabilities to support large cap projectswithin current areas of expertise.

– Become the preferred, added value partner to clients.

– Improved project results

The Problem

• The charter:

– Standardize project management practices across allcompanies

– Provide integrated project execution processes fromEngineering through Commissioning

– Incorporate best industry practices

13

DEFINING “WHAT YOU DO”

14

Defining “What you do”

• Underlying principles.

– Top down structure

– Relies on expertise from learned experience

– Communicates expectations by knowing the end at thebeginning


• First: develop a structure to organize processes bysubject matter.

– Started with CII “Knowledge Areas”

– Separated Project Management from Project Execution

– Finalized on set of “Key Activities”


17

PROJECT MANAGEMENT KEY ACTIVITIES PROJECT EXECUTION KEY ACTIVITIES

PM01 FRONT END PLANNING MANAGEMENT PE01 FRONT END PLANNING EXECUTION

PM02 PROJECT EXECUTION MANAGEMENT PE02 HSE IN DESIGN

PM03 CONTRACT MANAGEMENT PE03 SYSTEM ENGINEERING

PM04 RISK MANAGEMENT PE04 LAYOUT, 3D MODELING AND DISCIPLINE DESIGN

PM05 QUANTITY MANAGEMENT PE05 PROCUREMENT

PM06 ESTIMATING AND COST CONTROL PE06 SUBCONTRACTING

PM07 PLANNING AND SCHEDULING PE07 FABRICATION AND CONSTRUCTION

PM08 CHANGE MANAGEMENT PE08 COMMISSIONING

PM09 HSE MANAGEMENT

PM10 QUALITY MANAGEMENT

PM11 INFORMATION MANAGEMENT

• Company specific list of Key Activities


18

• Project Management is aligned to supportProject Execution


• First: develop a structure to organize the processes.

– Started with CII “Knowledge Areas”

– Separated Project Management from Project Execution

• Second: utilize the project life cycle to time phase theprocesses.

– Utilized traditional EPC phases for projects

– Added a Front End Planning (FEP) phase for thedevelopment of owner CAPEX process.

– Added a Proposal phase for the development ofproposals.


• Front End Planning

– Aligned FEP phase to CII Front End Planning (CII 213-1)for furthering industry standards

FRONT END PLANNING

FEP1 FEP3FEP2


21

ENGINEERING

PROCUREMENT

FABRICATION AND CONSTRUCTION

COMMISSIONING

MEPC1 MEPC2 MEPC3 MEPC4 MEPC5 MEPC6 MEPC8MEPC7 MEPC9 MSC1 MSC2 MSC3

• Project Execution

– Used well known industry nomenclature


22

• Proposals

– Needed a mechanism to separate proposals

– “slides” to reflect the different types of proposals:

• EPC

• Engineering services

• Construction only projects bid from owner plans andspecifications


23

PROCUREMENT

Critical PO's Awarded;

Basic Engineering

Completed

Layout & Main Structure

FrozenGlobal Design Complete

Detailed Engineering

Complete; Major

Subcontracts Awarded

EPC1 EPC2 EPC3 EPC4

ENGINEERING

• Subphases (aka Stages)

– Provides a unique interlocking relationship among theproject phases.


24

Critical PO's Awarded;

Basic Engineering

Completed

Layout & Main Structure

FrozenGlobal Design Complete

Detailed Engineering

Complete; Major

Subcontracts Awarded

EPC1 EPC2 EPC3 EPC4Piping & Instrument Diagram

-Material Selection reflected

- Pipe spec & spec breaks

-Valves shown

-Lines shown with estimated

sizes

-Design Basis issued

-'First Supplier Information'

included for 1st Priority

equipment

Master Equipment List

- Draft equipment list

completed (Initial Info)

- 'First Supplier Information'


Equipment

Piping & Instrument Diagram

-Critical lines sized

- HAZOP performed

-PCV/PSV and inline

instruments sized



equipment


-All Tagged items listed


included for 2nd Priority

Equipment


-All lines sized

-HAZOP comments

incorporated

-Vents & drains identified

-P&ID/3-D model comparison

done

-'Frozen Supplier Interface

Information' included for 1st,

2nd & 3rd Priority equipment


-Equipment list ready to be

used as basis of design

-All tagged items contain

process data, load data

-'Frozen Supplier Interface

Information' included for 1st,

2nd & 3rd Priority Equipment


-All instrument logic reflected

- Control and alarm settings

included

-Certified/final approved

vendor info implemented


-Equipment list ready to be

issued as a construction/field

support document

-Information updated based on

'Final Approved Supplier

Information' for all Equipment

• Milestone Objectives– List of significant interrelated progress requirements

from successful projects.

– Processes support milestone/stage gate objectives


Key Activity: PM01 Front End Planning Management:

MFEP3

Detailed ScopeConceptFeasibility

MFEP2

MFEP1

MFEP0

FRONT END PLANNING

RiskManagement

PM01.3-FEP1

RiskManagement

PM01.3-FEP2

RiskManagement

PM01.3-FEP3

CostEstimating

PM01.5-FEP1

CostEstimating

PM01.5-FEP2

CostEstimating

PM01.5-FEP3

QuantityEstimating

PM01.4-FEP3

QuantityEstimating

PM01.4-FEP2

ScheduleDevelopment

PM01.6-FEP1

ScheduleDevelopment

PM01.6-FEP2

ScheduleDevelopment

PM01.6-FEP3

PEPDevelopment

PM01.2-FEP2

PEPDevelopment

PM01.2-FEP3

FEPManagement

PM01.1-FEP1

FEPManagement

PM01.1-FEP2

FEPManagement

PM01.1-FEP3

• Process Maps– Roadmap of processes.


26

• Process Flow Diagram– Exploded view of process.

ALIGN AND INTEGRATE INDUSTRYPRACTICES

27

Align and Integrate Industry Practices

28

• Using the Key Activities and Life Cycle structure;build cross reference registers

Applicable Phases

P FEP E P C S10S-90 Cost Engineering Terminology 9/22/2015 All

11R-88 Required Skills and Knowledge of Cost Engineering 6/18/2013 All HR

12R-89

13S-90 Recommended Method for Determining Building Area 11/1/1990 7.3

14R-90 Responsibility and Required Skills for a Planning and Scheduling Professional 9/19/2006 7.2 HR

15R-81 Profitablity Methods 7/16/2008 3.3, 6.1 PM01 X

16R-90

Conducting Technical and Economic Evaluations - As Applied to the Process and

Utilitity Industries4/1/1991 3.2, 3.3 PM01 X

17R-97 Cost Estimate Classification System 11/29/2011 7.3 PM01 PM06 X X

18R-97 Cost Estimate Classification System - As Applied in EPC for the Process Industries 3/1/2016 7.3 PM01 PM06 X X

19R-97 Estimate Preparation Costs - As Applied for the Process Industries 6/19/1998 7.3 PM06 X

20R-98 Project Code of Accounts 1/27/2003 7.1, 7.2, 7.3 PM06 PM05 PM07

21R-98 Project Code of Accounts - As Applied in EPC for the Process Industries 1/27/2003 7.1, 7.2, 7.3 PM06 PM05 PM07

22R-01 Direct labor Productivity Measurement - As Applied in Construction and Major Maintenance Projects4/26/2004 9.2 PM06 X X

23R-02 Identification of Activities 5/3/2007 7.2 PM07 PM05 PM06 X X X X

24R-03 Developing Activity Logic 3/26/2004 7.2 PM07 X X X X

25R-03 Estimating Lost Labor Productivity in Construction Claims 4/13/2004 6.4 PM05 PM06 PM07 PM08 X

27R-03 Schedule Classification System 11/12/2010 7.2 PM01 PM07 X X

28R-03 Developing Location Factors by Factoring - As Applied in AEC and EPC 10/19/2006 7.3, 10.4 X

29R-03 Forensic Schedule Analysis 4/25/2011 6.4 PM07

30R-03 Implementing Project Constructability 5/20/2009 11.5 PE04 PE05 PE06 PE07 X X X

31R-03 Reviewing, Validating and Documenting the Estimate 5/12/2009 7.3 PM06 X

32R-04 Determining Activity Durations 1/14/2012 7.2 PM07 PM05 X X X X

34R-05 Basis of Estimate 5/2/2014 7.3 PM01 PM06 X X

35R-09

Development of Cost Estimate Plans - As Applied for the Building and Gen Const

Industries2/14/2015 7.3 PM06

AACE International Recommended Practices

TCM Ref Project TemplateRP No. Publication Title Published


29


Applicable Phases

P FEP E P C S10S-90 Cost Engineering Terminology 9/22/2015 All

11R-88 Required Skills and Knowledge of Cost Engineering 6/18/2013 All HR

12R-89

13S-90 Recommended Method for Determining Building Area 11/1/1990 7.3

14R-90 Responsibility and Required Skills for a Planning and Scheduling Professional 9/19/2006 7.2 HR

15R-81 Profitablity Methods 7/16/2008 3.3, 6.1 PM01 X

16R-90

Conducting Technical and Economic Evaluations - As Applied to the Process and

Utilitity Industries4/1/1991 3.2, 3.3 PM01 X

17R-97 Cost Estimate Classification System 11/29/2011 7.3 PM01 PM06 X X

18R-97 Cost Estimate Classification System - As Applied in EPC for the Process Industries 3/1/2016 7.3 PM01 PM06 X X

19R-97 Estimate Preparation Costs - As Applied for the Process Industries 6/19/1998 7.3 PM06 X

20R-98 Project Code of Accounts 1/27/2003 7.1, 7.2, 7.3 PM06 PM05 PM07

21R-98 Project Code of Accounts - As Applied in EPC for the Process Industries 1/27/2003 7.1, 7.2, 7.3 PM06 PM05 PM07

22R-01 Direct labor Productivity Measurement - As Applied in Construction and Major Maintenance Projects4/26/2004 9.2 PM06 X X

23R-02 Identification of Activities 5/3/2007 7.2 PM07 PM05 PM06 X X X X

24R-03 Developing Activity Logic 3/26/2004 7.2 PM07 X X X X

25R-03 Estimating Lost Labor Productivity in Construction Claims 4/13/2004 6.4 PM05 PM06 PM07 PM08 X

27R-03 Schedule Classification System 11/12/2010 7.2 PM01 PM07 X X

28R-03 Developing Location Factors by Factoring - As Applied in AEC and EPC 10/19/2006 7.3, 10.4 X

29R-03 Forensic Schedule Analysis 4/25/2011 6.4 PM07

30R-03 Implementing Project Constructability 5/20/2009 11.5 PE04 PE05 PE06 PE07 X X X

31R-03 Reviewing, Validating and Documenting the Estimate 5/12/2009 7.3 PM06 X

32R-04 Determining Activity Durations 1/14/2012 7.2 PM07 PM05 X X X X

34R-05 Basis of Estimate 5/2/2014 7.3 PM01 PM06 X X

35R-09

Development of Cost Estimate Plans - As Applied for the Building and Gen Const

Industries2/14/2015 7.3 PM06

AACE International Recommended Practices

TCM Ref Project TemplateRP No. Publication Title Published

17R-97 Cost Estimate Classification System PM01 PM06

27R-03 Schedule Classification System PM01 PM07


30

Last

Updated:9/25/2015

P FEP E P C S

0001

Pipe Supports Details/Piping line Class Designator System/Piping Service

Index/ASME B31.3 Metallic Piping Fabrication and Examination SpecificationPE04

1 SD-1 Attributes of Materials Management Systems 4/1/1985 Not Active Information 3.99 PE05 PE07

1-01 WS1-01 Effective PDRI Facilitation: Better Results through Better Deliver Active Best Practice 1.01 PM04 X

1-1 RS1-1 CICE Impact on the Construction Industry 12/1/1986 Not Active Information 8.99 OP00

002 Instrumentation Guidelines/Data Sheets/Details, etc. PE04 X

2 IR BMM-2 Benchmarking & Metrics Implementation Toolkit Pocket Guide 5/1/2004 Best Practice 8.05 OP00

2 SD-2 Industry Exposure to the Business Roundtable's CICE Project 12/1/1984 Not Active Information 8.99 OP00

2-1 RS2-1 Construction Industry Institute Model Plant 10/1/1986 Active Other Practice 6.04

2-2 RS2-2 Construction Industry Institute Model Plant Update 11/1/1988 Active Other Practice 6.04

2-3 RS2-3 Productivity Measurement: An Introduction 10/1/1990 Active Other Practice 6.04 PM06 PM05 X X X

3 IR BMM-3 Implementing Project Security Practices 7/1/2005 Other Practice 14.01 PE07 X

3 SD-3 Industry Awareness of the Business Roundtable's CICE Project 7/1/1985 Not Active Information 8.99 OP00

3-1 RS3-1 Constructability: A Primer 7/1/1986 Active Best Practice 2.01 PE03 PE07 X X

3-2 RS3-2 Guidelines for Implementing a Constructability Program 7/1/1987 Not Active Information 2.99 PE03 PE07 X X

3-3 SP3-3 Constructability Concepts File 8/1/1987 Not Active Information 2.99 PE03 PE07 X X

4 SP4 Project Materials Management Handbook 9/1/1987 Not Active Information 3.99 PE05 PE07 X X

4 SD-4 Constructability Improvement During Conceptual Planning 3/1/1986 Active Best Practice 2.01 PE01 PM01 X

5 SD-5 Constructability Improvement During Engineering and Procurement 5/1/1986 Not Active Information 2.99 PE05 PE05 PE07 X X

5-1 RS5-1 Impact of Various Construction Contract Types and Clauses on Project Performance 7/1/1986 Active Other Practice 10.02 PM03 PM04 X

5-2 RS5-2 Incentive Plans: Design & Application Considerations 11/1/1988 Not Active Information 10.99 PM03 X

5-3 RS5-3 Contract Risk Allocation and Cost Effectiveness 11/2/1988 Not Active Information 10.99 PM04 X

5-31 TAL5-31 Construction Safety: Zero Accident Techniques 11/1/2004 Active Best Practice 11.01 PE07 PM02 PM09 X X

6 SD-6 Control of Construction Project Scope 3/1/1986 Not Active Information 9.99 PM05 PM06 PM07 PM08 X X

6 SP6 Partnering: Meeting the Challenges of the Future 8/1/1989 Not Active Information 7.99 PM02 PM03 X

6-1 RS6-1 Project Control for Engineering 7/1/1986 Not Active Other Practice 9.99 PM05 PM06 PM07 PM08 X

6-2 RS6-2 Scope Definition and Control 7/1/1986 Not Active Information 1.99 PM02 PM05 PM08 X X X X

6-3 RS6-3 Model Planning and Controlling System for EPC of Industrial Projects 4/1/1987 Not Active Other Practice 9.99 PM05 PM06 PM07 PM08 X X X

6-4 RS6-4 Contractor Planning for Fixed-Price Construction 5/1/1987 Active Other Practice 9.02 PM07 X

6-5 RS6-5 Project Control for Construction 9/1/1987 Active Other Practice 9.01 PM05 PM06 PM07 X

6-6 RS6-6 Work Packaging for Project Control 11/1/1988 Active Other Practice 9.02 PE07 PM03 PM05 X X X

6-7 RS6-7 Concepts and Methods of Schedule Compression 11/1/1988 Active Other Practice 9.01 PM07 X X X

6-8 RS6-8 Management of Project Risks and Uncertainties, Version 1.1 4/1/2010 Active Information 10.04 PM04 X X X

6-9 RS6-9 Planning Construction Activity to Support the Startup Process 2/1/1990 Not Active Information 1.99 PM07 PE07 PE08 X

CII Publications Register

Applicable PhasesCategory

Knowledge

AreaProject TemplatePub No. Publication Publication Title Published Status



31

Last

Updated:9/25/2015

P FEP E P C S

0001

Pipe Supports Details/Piping line Class Designator System/Piping Service

Index/ASME B31.3 Metallic Piping Fabrication and Examination SpecificationPE04

1 SD-1 Attributes of Materials Management Systems 4/1/1985 Not Active Information 3.99 PE05 PE07

1-01 WS1-01 Effective PDRI Facilitation: Better Results through Better Deliver Active Best Practice 1.01 PM04 X

1-1 RS1-1 CICE Impact on the Construction Industry 12/1/1986 Not Active Information 8.99 OP00

002 Instrumentation Guidelines/Data Sheets/Details, etc. PE04 X

2 IR BMM-2 Benchmarking & Metrics Implementation Toolkit Pocket Guide 5/1/2004 Best Practice 8.05 OP00

2 SD-2 Industry Exposure to the Business Roundtable's CICE Project 12/1/1984 Not Active Information 8.99 OP00

2-1 RS2-1 Construction Industry Institute Model Plant 10/1/1986 Active Other Practice 6.04

2-2 RS2-2 Construction Industry Institute Model Plant Update 11/1/1988 Active Other Practice 6.04

2-3 RS2-3 Productivity Measurement: An Introduction 10/1/1990 Active Other Practice 6.04 PM06 PM05 X X X

3 IR BMM-3 Implementing Project Security Practices 7/1/2005 Other Practice 14.01 PE07 X

3 SD-3 Industry Awareness of the Business Roundtable's CICE Project 7/1/1985 Not Active Information 8.99 OP00

3-1 RS3-1 Constructability: A Primer 7/1/1986 Active Best Practice 2.01 PE03 PE07 X X

3-2 RS3-2 Guidelines for Implementing a Constructability Program 7/1/1987 Not Active Information 2.99 PE03 PE07 X X

3-3 SP3-3 Constructability Concepts File 8/1/1987 Not Active Information 2.99 PE03 PE07 X X

4 SP4 Project Materials Management Handbook 9/1/1987 Not Active Information 3.99 PE05 PE07 X X

4 SD-4 Constructability Improvement During Conceptual Planning 3/1/1986 Active Best Practice 2.01 PE01 PM01 X

5 SD-5 Constructability Improvement During Engineering and Procurement 5/1/1986 Not Active Information 2.99 PE05 PE05 PE07 X X

5-1 RS5-1 Impact of Various Construction Contract Types and Clauses on Project Performance 7/1/1986 Active Other Practice 10.02 PM03 PM04 X

5-2 RS5-2 Incentive Plans: Design & Application Considerations 11/1/1988 Not Active Information 10.99 PM03 X

5-3 RS5-3 Contract Risk Allocation and Cost Effectiveness 11/2/1988 Not Active Information 10.99 PM04 X

5-31 TAL5-31 Construction Safety: Zero Accident Techniques 11/1/2004 Active Best Practice 11.01 PE07 PM02 PM09 X X

6 SD-6 Control of Construction Project Scope 3/1/1986 Not Active Information 9.99 PM05 PM06 PM07 PM08 X X

6 SP6 Partnering: Meeting the Challenges of the Future 8/1/1989 Not Active Information 7.99 PM02 PM03 X

6-1 RS6-1 Project Control for Engineering 7/1/1986 Not Active Other Practice 9.99 PM05 PM06 PM07 PM08 X

6-2 RS6-2 Scope Definition and Control 7/1/1986 Not Active Information 1.99 PM02 PM05 PM08 X X X X

6-3 RS6-3 Model Planning and Controlling System for EPC of Industrial Projects 4/1/1987 Not Active Other Practice 9.99 PM05 PM06 PM07 PM08 X X X

6-4 RS6-4 Contractor Planning for Fixed-Price Construction 5/1/1987 Active Other Practice 9.02 PM07 X

6-5 RS6-5 Project Control for Construction 9/1/1987 Active Other Practice 9.01 PM05 PM06 PM07 X

6-6 RS6-6 Work Packaging for Project Control 11/1/1988 Active Other Practice 9.02 PE07 PM03 PM05 X X X

6-7 RS6-7 Concepts and Methods of Schedule Compression 11/1/1988 Active Other Practice 9.01 PM07 X X X

6-8 RS6-8 Management of Project Risks and Uncertainties, Version 1.1 4/1/2010 Active Information 10.04 PM04 X X X

6-9 RS6-9 Planning Construction Activity to Support the Startup Process 2/1/1990 Not Active Information 1.99 PM07 PE07 PE08 X

CII Publications Register

Applicable PhasesCategory

Knowledge

AreaProject TemplatePub No. Publication Publication Title Published Status


6-2 RS6-2 Scope Definition and Control 1.99 PM02 PM05 PM08

6-3 RS6-3 Model Planning and Controlling System for EPC of Industrial Projects 9.99 PM05 PM06 PM07 PM08

6-4 RS6-4 Contractor Planning for Fixed-Price Construction 9.02 PM07

6-5 RS6-5 Project Control for Construction 9.01 PM05 PM06 PM07

6-6 RS6-6 Work Packaging for Project Control 9.02 PE07 PM03 PM05

6-7 RS6-7 Concepts and Methods of Schedule Compression 9.01 PM07

6-8 RS6-8 Management of Project Risks and Uncertainties, Version 1.1 10.04 PM04

6-9 RS6-9 Planning Construction Activity to Support the Startup Process 1.99 PM07 PE07 PE08

6-10 RS6-10 The Impact of Changes on Construction Cost and Schedule 9.01 PM06 PM07 PM08


• Example: Integrate AACE Recommended Practices forEstimate Classification into a company specific processfor Cost Estimating in the “Detailed Scope” stage ofFront End Planning

• Look for AACE RPs that cross reference to PM01

– AACE Recommended Practice 18R-97, Cost EstimateClassification System

– AACE Recommended Practice 27R-03 ScheduleClassification System


• Estimate Classification System


Comparing usage purposes for each of the estimate classes; note the alignment with sub

phases in our company EPC Template:

AACE End Usage EPC Template Sub Phase

Concept Screening FEP1

Study or Feasibility FEP2

Budget Authorization… FEP3

Control… P2 (EPC Proposal)

…Bid/Tender P2 (Plans & Specs Bid)

AACE Estimate and Schedule Class CLASS 5 CLASS 4 CLASS 3 CLASS 2 CLASS 1

EPC Template Subphase FEP1 FEP2 FEP3 P2 (EPC Proposal) EPC4/P2 (Plans&Specs)

ESTIMATE & SCHEDULE CLASSIFICATION


• Estimate Input and Maturity Matrix


AACE Estimate and Schedule Class CLASS 5 CLASS 4 CLASS 3 CLASS 2 CLASS 1

EPC Template Subphase FEP1 FEP2 FEP3 P2 (EPC Proposal) EPC4/P2 (Plans&Specs)

Project Execution Deliverables

PE01 FEP ExecutionBlock Flow Diagrams Complete

Unit Arrangement Complete

PE03 System Engineering

Process Flow Diagrams (PFDs)

Based on Process Equip

Reference information;

Major Lines Sized

Based on Updated Process

Equip Reference Info;

Estimated BOP Equip Info


Proposal Info; BOP Equip

Reference/Estimated

Information

Issued for Design

Utility Flow Diagrams (UFDs)



Major Lines Sized






Reference/Estimated

Information

Issued for Design

Heat & Material Balances



Estimated BOP Equip






Reference/Estimated

Information

Issued for Design

ESTIMATE & SCHEDULE CLASSIFICATION


37

• Process Flow Diagram– Shows Class 4 Estimate and Schedule requirement to

complete a Class 3 Estimate and Schedule

ASSIGN ROLES AND RESPONSIBILITIES

38

Assign Roles and Responsibilities

• Accountability

• Communicates expectations

• Provides consistency across projects and teams

• Used for training

39


40

PROJECT MANAGEMENT HANDBOOKPERFORMANCE REQUIREMENTS

KEY ACTIVITY

Performance Requirement Corporate Hdqtrs Home Office Project Team

VP

OP

S

PM01 FRONT END PLANNING MANAGEMENT WFD PM-000

Cost Estimating AFD PM01.5-FEP1-FEP3

Develop Class 3 Estimate for selected technology X P K PM01 F PM01-13 X

Obtain PFDs - FEP3 for selected technology P K PM01 F X

Obtain P&IDs - FEP3 for selected technology K PM01 F X

Obtain Equipment Layout - FEP3 for selected

technologyP K PM01 F X

Obtain Facility Layout - FEP3 for selected technology P K PM01 F X

Update estimate based on process equipment

supplier information - FEP3P S K PM01 F X

Provide Class 3 Direct Resource information to

SchedulerP S K PM01 F X

Determine Indirect, Support and CM Cost durations

from Class 3 ScheduleP S K PM01 F X

Provide Costs to be used for Contingency Calculation P S K PM01 F X

Include Contingency Calculation - FEP3 from Risk

ManagementP S K PM01 F X

Update owner/other costs as required K PM01 F X

Schedule Development AFD PM01.6-FEP1-FEP3

DIR

EST Form /

Exhibit

Number

Handbook

Reference

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STEN

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FRONT END PLANNINGDevelop Class 3 Estimate for selected technology

Obtain PFDs - FEP3 for selected technology

Obtain P&IDs - FEP3 for selected technology


technology

Obtain Facility Layout - FEP3 for selected technology


supplier information - FEP3


Scheduler


from Class 3 Schedule

Provide Costs to be used for Contingency Calculation


Management

Update owner/other costs as required


41

PROJECT MANAGEMENT HANDBOOKPERFORMANCE REQUIREMENTS

KEY ACTIVITY

Performance Requirement Corporate Hdqtrs Home Office Project Team

VP

OP

S

PM01 FRONT END PLANNING MANAGEMENT WFD PM-000

Cost Estimating AFD PM01.5-FEP1-FEP3

Develop Class 3 Estimate for selected technology X P K PM01 F PM01-13 X

Obtain PFDs - FEP3 for selected technology P K PM01 F X

Obtain P&IDs - FEP3 for selected technology K PM01 F X


technologyP K PM01 F X

Obtain Facility Layout - FEP3 for selected technology P K PM01 F X


supplier information - FEP3P S K PM01 F X


SchedulerP S K PM01 F X


from Class 3 ScheduleP S K PM01 F X

Provide Costs to be used for Contingency Calculation P S K PM01 F X


ManagementP S K PM01 F X

Update owner/other costs as required K PM01 F X

Schedule Development AFD PM01.6-FEP1-FEP3

DIR

EST Form /

Exhibit

Number

Handbook

Reference

CO

STEN

G

SCH

ED

Process or Handbook

CEO

RM

C

CO

O

GC

OU

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VP

HSE F

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cep

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FRONT END PLANNING

VP

OP

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X P K

P K

K

P K

P K

P S K

P S K

P S K

P S K

P S K

K

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R

DIR

PR

OC

PA

YR

OLL

PR

OJ

MG

R

PR

OP

MG

R

AC

CTG

VERIFY COMPLIANCE

42

Verify Compliance

• Checklists

– Completed by team members

– Compiled and reviewed by project manager andoperations in preparation for formal Milestone Review

43

Subtopic Title

44

• Cost Estimating checklist for Milestone FEP3

Project Title:

Project No.:

Client:

Milestone: MFEP3 Sign Date

Auditee:

Key Activity Auditor:

Activity

Checklist Item Responsibility Process Form No. Complete Remarks

PM01 FRONT END PLANNING MANAGEMENTQuantity Estimate

Class 3 Quantity Estimate

Reflects inforomation included in final Process Equipment proposal fromselected technology providerReflects piping / electrical routings shown on final Facility Layout

Reflects Vertical / Horizontal control set on final Site Plan

Reflects information shown on final Site and Facility Layouts

Definitive quantity estimate based on final layouts and historicalinformation by Stem Acct

Cost EstimateClass 3 Cost Estimate

Direct costs calculated from quantity estimate; verified by quotes?

Reflects quantities from final quantity estimate?

Labor rates based on applicable labor agreement

Payroll Tax & Insurance rates verified

Includes evaluated Process Equipment costs from selcted technology

provider?Includes budgetary quotes for significant BOP Equipment

Includes budgetary quotes for significant Fab Material / Assemblies

Includes budgetary quotes for bulk materials

Includes budgetary quotes for major subcontractors?

Includes budgetary quotes for significant outside services

Indirect/Support/Management costs based on Class 3 Schedule?

Support costs (indirect work accounts) calculated?

Includes budgetary quotes for major rental equipment / services

Engineering Costs identified and calculated?

General Conditions Costs identified and calculated?

Includes Currency hedging for multiple currency exchange rates

Includes Duties/Taxes on imported equipment

Contingency Calculation finalized?

Mark ups reflect management approval?

"Detailed Scope"

MILESTONE REVIEW CHECKLIST

Subtopic Title

45

• Note references to quality of information shown onEstimating Maturity and Input Matrix

Project Title:

Project No.:

Client:

Milestone: MFEP3 Sign Date

Auditee:

Key Activity Auditor:

Activity

Checklist Item Responsibility Process Form No. Complete Remarks



Reflects inforomation included in final Process Equipment proposal fromselected technology providerReflects piping / electrical routings shown on final Facility Layout




Cost EstimateClass 3 Cost Estimate

Direct costs calculated from quantity estimate; verified by quotes?

Reflects quantities from final quantity estimate?

Labor rates based on applicable labor agreement

Payroll Tax & Insurance rates verified

Includes evaluated Process Equipment costs from selcted technology

provider?Includes budgetary quotes for significant BOP Equipment

Includes budgetary quotes for significant Fab Material / Assemblies

Includes budgetary quotes for bulk materials

Includes budgetary quotes for major subcontractors?

Includes budgetary quotes for significant outside services

Indirect/Support/Management costs based on Class 3 Schedule?

Support costs (indirect work accounts) calculated?

Includes budgetary quotes for major rental equipment / services

Engineering Costs identified and calculated?

General Conditions Costs identified and calculated?

Includes Currency hedging for multiple currency exchange rates

Includes Duties/Taxes on imported equipment

Contingency Calculation finalized?

Mark ups reflect management approval?

"Detailed Scope"

MILESTONE REVIEW CHECKLIST



Reflects information included in final Process Equipment proposal fromselected technology providerReflects piping / electrical routings shown on final Facility Layout




Verify Compliance

• Checklists

– Detailed audit document to verify PerformanceRequirements were completed

– Completed by team members

– Compiled and reviewed by project manager andoperations in preparation for formal Milestone Review

• Milestone Reviews

– Major reviews are conducted by operationsmanagement

– Minor reviews are conducted by project management

– Results published and reported to corporate officers

46

Verify Compliance

• Record findings from Milestone/Stage Gate review– Milestone Objective discrepancies (MO)– Corrective Actions required (CA)– Punch List items (PL)

47

Project Title:

Project No.:

Client:

Milestone: FEP3 Sign Date

Project Manager:

Key Activity Site Manager:

Control/Execution LevelCorrective Action/Punchlist Item

Ty

pe

ResponsibilityPlanned

Completion

Actual

Completion Remarks

PM01 FRONT END PLANNING MANAGEMENT

Milestone Requirements (Control Level)

1 MO2 CA

34

56

789

10

Execution Level Requirements

1 CA2 PL

34

56

78

910

MILESTONE REVIEW CORRECTIVE ACTIONS & PUNCHLIST

Collaboration Across the Enterprise

• Milestone / Stage Gate Review result

48

Project Manager:Site Manager:

PM01 Front End Planning Management PE01 Front End Planning Execution

Control Level Control Level

Execution Level Execution Level

Milestone Objectives Completed Milestone Objectives Completed

Corrective Actions Required Corrective Actions Required

Punchlist Items Punchlist Items

No No No No

Yes Yes Yes Yes

Corrective Actions Required. The project has met the requirements to pass the Milestone Review. Plan implemented to

complete required corrective actions.

Punch List Items Open. The project has met the requirements to pass the Milestone Review. Plan implemented to close out the

open Punch List Items.X

Yes Yes

PROJECT MANAGEMENT PROJECT EXECUTION

Project Title:

Project No.:Client:

MILESTONE REVIEW SUMMARY REPORT

Milestone: FEP3 Sign Off Date

Milestone Objectives not met. The project has not met the requirements to pass the Milestone Review. Plan implemented to

complete the Milestone Objectives. Follow up review required.

COLLABORATION ACROSS THEENTERPRISE

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Collaboration Across the Enterprise

50

SUMMARY

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Conclusion

• Having documented processes provides a tangiblemedium for defining and communicating “what you do”

• Once company processes are defined, align industrypublications to the company processes/structure

• Implement the applicable industry practices or portionsof practices

• Provide quick, easy access to processes and informationacross the enterprise

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QUESTIONS/COMMENTS?(PLEASE USE MICROPHONE)

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